Real estate can be a very worthwhile investment, but rental leasing is often more challenging than people expect.
You need to know what you're doing if you want to get the best returns on your investment. If you go in without any strategy, you might face issues that will cost you money. There are several things you should have in mind when preparing to lease your Phoenix real estate.
In this guide, we'll cover some of the most important things to know about rental leasing in Phoenix. Keep reading for more.
1. Income Potential
This is one of the first things you want to know about any property you're thinking of buying. Properties are sizable investments, so you want to make sure you can get the best ROI possible. If you end up with a property that has a low-income potential, it will limit your earnings and might prevent you from being able to buy another property.
For real estate in Phoenix, you can use the 1% rule as a guideline. It states that the monthly income from a rental property should be at least 1% of the property's overall value. This can be slightly different if you don't need as much money due to the downpayment, financing options, etc.
The most important thing is to ensure the monthly income covers more than the mortgage. This will offer a slight margin to help if your property is vacant for a while between tenants.
2. Who Your Ideal Tenant Would Be
When looking for tenants, you shouldn't just take the first person who applies. The tenant you go for could have a huge impact on your experience as a landlord, so it's vital to make sure they're suitable.
For example, you don't want someone who has a history of failing to pay rent or causing property damage. You may also want to set certain income requirements.
A thorough tenant screening process will help you find tenants who fit well. A property management company can do this to help you find the best tenants. They can also market your property effectively so that you have a wider pool of tenants to choose from.
3. How You'll Manage the Property
Rental leasing in Phoenix might not be as easy as you expect. Managing a property can take a lot of work, and things only become more challenging when you invest in multiple properties.
Many investors turn to property management companies for help. A property manager can oversee various day-to-day tasks such as property marketing, tenant screening, rent collection, maintenance, and more.
They can often do this far more effectively than any investor can. This will help you get the most out of your properties and you won't have to do all the difficult work yourself.
Find Assistance With Rental Leasing
Phoenix rental leasing can be tricky, so make sure you know what you're doing. Determine the income potential of properties as well as your ideal tenants as early as you can. For help with your rental leasing, you can work with a professional property management company like PMI Phoenix Golden West.
We have been providing full-service real estate management in Phoenix, AZ for almost 20 years. Take a look at our residential property management services page to find out more about how we can help.
